“Brad’s drink” was created in the summer of 1893 by pharmacist Caleb Bradham of New Bern, North Carolina. The drink was renamed Pepsi Cola in 1898, after pepsin and cola nuts were used in the recipe. Also in 1898, Caleb Bradham wisely bought the trade name “Pep Cola” for $100 from a competitor from Newark, New Jersey that had gone broke. The new name was trademarked on June 16th, 1903. Bradham’s neighbor, an artist designed the first Pepsi logo and ninety-seven shares of stock for Bradham’s new company were issued (Bellis, 2012). After seventeen years of success, Caleb Bradham lost Pepsi Cola. He had gambled on the fluctuations of sugar prices during W.W.I, believing that sugar prices would continue to rise but they fell instead leaving Caleb Bradham with an overpriced sugar inventory.
Pepsi Cola went bankrupt in 1923. In 1931, Pepsi Cola was bought by the Loft Candy Company Loft president, Charles G. Guth who reformulated the popular soft drink. Guth struggled to make a success of Pepsi and even offered to sell Pepsi to the Coca-Cola company, who refused to offer a bid (Bellis, 2012). In May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia. The soft drink was first sold to the public at the soda fountain in Jacob’s Pharmacy in Atlanta on May 8, 1886. About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a loss (Bellis, 2012). In 1887, another Atlanta pharmacist and businessman, Asa Candler bought the formula for Coca Cola from inventor John Pemberton for $2,300.
By the late 1890s, Coca Cola was one of America’s most popular fountain drinks, largely due to Candler’s aggressive marketing of the product. With Asa Candler, now at the helm, the Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900. Until the 1960s, both small town and big city dwellers enjoyed carbonated beverages at the local soda fountain or ice cream saloon. Often housed in the drug store, the soda fountain counter served as a meeting place for people of all ages. Often combined with lunch counters, the soda fountain declined in popularity as commercial ice cream, bottled soft drinks, and fast food restaurants became popular (Bellis, 2012).
Products and Services
PepsiCo is a global food and beverage leader with a diverse product portfolio that includes 22 brands that each generate more than $1 billion each in annual retail sales. Pepsi-Cola North America is the refreshment beverage unit of PepsiCo, Inc., in the United States and Canada. Its U.S. brands include Pepsi, Mountain Dew, Sierra Mist, SoBe, AMP Energy, IZZE, Naked Juice, Propel, Mug, and Aquafina, among others. The company also makes and markets North America’s best-selling ready-to-drink iced teas and coffees, respectively, via joint ventures with Lipton and Starbucks (PepsiCo, 2012). Frito-Lay North America is the $13 billion convenient foods business unit of PepsiCo. For more than 75 years, Frito Lay has enjoyed growing the best snacks on earth starting with simple, farm-grown ingredients. To continue growing the best snacks on earth, they are working to reduce their impact on the environment by improving how they make their snacks.
Frito-Lay is also dedicated to giving consumers a wider range of healthier choices. They offer great-tasting chips with less fat through their Baked! Line and snacks made only from natural ingredients, which contain no artificial colors, flavors or preservatives with their Natural line. All of their snack chips contain 0 grams of trans fat (PepsiCo, 2012). Tropicana Products, Inc., a division of PepsiCo, Inc., is the leading producer and marketer of branded fruit juices. Tropicana markets its products in the U.S. under a variety of brand names, including the Tropicana not-from-concentrate line of juices: Dole® juices and juice blends; Tropicana® Juices, Trop50 and Tropicana Twister® juice beverages. The Dole brand name is licensed from Dole Food Company, Inc. (PepsiCo, 2012). Quaker brands have been around for over a century. They are symbols of quality, great taste, and nutrition. Holding No.1 positions in their respective categories are favorites such as Quaker Oats, Quaker Rice Cakes, Chewy Granola Bars and Rice-A-Roni®. With its Aunt Jemima® brand, Quaker is also a leading manufacturer of pancake syrups and mixes.
It is among the four largest manufacturers of cold cereals with popular brands like Cap’n Crunch® and Life® (PepsiCo, 2012). Available in more than 80 countries, Gatorade’s line of performance drinks adds over 45 years of rehydration and sports nutrition research to the PepsiCo portfolio. In early summer of 1965, a University of Florida assistant football coach sat down with a team of university physicians and asked them to determine why so many of his players were being affected by heat and heat-related illnesses. The researchers Dr. Robert Cade, Dr. Dana Shires, Dr. H. James Free and Dr. Alejandro de Quesada soon discovered two key factors that were causing the Gator players to “wilt”: the fluids and electrolytes the players lost through sweat were not being replaced, and the large amounts of carbohydrates the players’ bodies used for energy were not being replenished (PepsiCo, 2012). The researchers then took their findings into the lab, and scientifically formulated a new, precisely balanced carbohydrate-electrolyte beverage that would adequately replace the key components lost by Gator players through sweating and exercise.
They called their concoction “Gatorade.” After years of careful research by the staff at GSSI into the needs of athletes engaged in high-demand training and competition, Gatorade launched the Gatorade Performance Series, an elite line of sports nutrition products, in 2001. These products include Gatorade Energy Drink, Gatorade Energy Bar, and the Gatorade Nutrition Shake (PepsiCo, 2012). Four years later, after studying endurance athletes, GSSI developed the Gatorade Endurance Formula. Featuring a higher concentration of sodium the key electrolyte found in Original Thirst Quencher and four other electrolytes lost in sweat, Gatorade Endurance Formula became a mainstay on racetracks the world over (PepsiCo, 2012). The Coca-Cola Company is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, the world’s most valuable brand, our Company’s portfolio features 15 billion dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, we are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy our beverages at a rate of 1.8 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that reduce our environmental footprint, support active, healthy living, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world’s top 10 private employers with more than 700,000 system employees (Coca-Cola Journey, 2012 ).
PepsiCo is proud to offer consumers a wide range of products that deliver great taste, nutritional value, convenience and affordability. They’re committed to playing a responsible role in health and wellness by encouraging consumers to adopt healthy lifestyles, beginning with offering consumers a choice of a wide variety of products. PepsiCo is always finding innovative ways to reduce the use of energy, water and packaging, and to better serve consumer wants and needs through new products and packaging. Through continuously expand their distribution network to make their enjoyable products more widely available. PepsiCo works relentlessly to improve productivity so they can offer affordable products to a broad range of consumers (PepsiCo, 2012). Coca-Cola system is a global business that operates on a local scale, in every community where we do business.
Coca-Cola is able to create global reach with local focus because of the strength of the Coca-Cola system, which comprises our Company and our nearly 300 bottling partners worldwide (Coca-Cola Journey, 2012 ). While many view our Company as simply “Coca-Cola,” our system operates through multiple local channels. Our Company manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives. Our bottling partners manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell our products to consumers (Coca-Cola Journey, 2012 ).
Since 2007, PepsiCo has employed a Supplier Code of Conduct (ScoC) globally. The PepsiCo Supplier Code of Conduct communicates our global expectations in the areas of labor practices, associate health and safety, environmental management and business integrity (PepsiCo, 2012). Our Supplier Code is based on the International Labor Organization, United Nations Global Compact and other internationally recognized standards. The ScoC includes 13 standards that require suppliers to adhere to the following: basic compliance with local law, respect for human rights and prohibiting all forms of forced or compulsory labor, ensuring no child labor is used, and cooperating with reasonable assessment processes requested by PepsiCo. The ScoC is communicated in 19 languages, and is mandatory in procurement contracts globally (PepsiCo, 2012). Our suppliers and business partners are vital to our continued success.
They help us refresh the world, more than 1.7 billion times every day, by delivering necessary products and services for our business (Coca-Cola Journey, 2012 ). Having a sound, stable and ethical supply base is important for our growth and the footprint we leave in local communities around the world. Our suppliers provide our system with materials, including ingredients, packaging and machinery, as well as goods and services. As a company, we have a responsibility to hold our direct suppliers and bottling partners to standards no less than those required by applicable law. We also have an opportunity to support community development by purchasing goods and services from minority- and women-owned business enterprises (MWBEs) (Coca-Cola Journey, 2012 ).
Our suppliers are expected, at a minimum, to conduct business in an ethical manner and comply with all applicable laws and regulations. Our Supplier Guiding Principles (SGPs) communicate our values and expectations for our bottling partners and business partners. The SGPs are a part of all supplier agreements, and a pre-certification practice is in place for trademark marketing suppliers. Suppliers also are provided training and assistance programs on an as-needed basis for areas where they need to improve their operations (Coca-Cola Journey, 2012 ).
In 2010, PepsiCo created the Global Sustainability team, whose role is to develop, implement and enforce standards to ensure consistency and quality in our sustainability reporting and ultimately accelerate our Performance with Purpose mission (PepsiCo, 2012). More specifically, an overall governance structure has been defined and implemented. This includes the creation of the Sustainability Steering Committee (SSC), made up of the most senior members of the organization (the majority report directly to our CEO), as well as the establishment of Sustainability Leadership Teams across all four planks, based on defined roles and selection criteria, and guided by PepsiCo’s Public Policy Coordinating Group (PepsiCo, 2012).
The Performance Sustainability Leadership Team (PSLT), Human Sustainability Leadership Team (HSLT), Environmental Sustainability Leadership Team (ESLT) and Talent Sustainability Leadership Team (TSLT) are responsible for creating our overall strategy, driving implementation and identifying issues/risks, which are then communicated to the Sustainability Steering Committee (PepsiCo, 2012). Since our first soda fountain sales in 1886, we have been a driver of marketplace innovation and an investor in local economies.
Today we lead the beverage industry with more than 500 beverage brands – including four of the world’s top-five sparkling brands. But while our business opportunities are enormous, our commitment to our consumers and the communities in which we operate is even greater (Coca-Cola Journey, 2012 ). Muhtar Kent, our Chairman of the Board and Chief Executive Officer, leads us into the new century with a firm commitment to the values and spirit of the world’s greatest brand. In our journey to become a sustainable, profitable growth company, our management structure has evolved to sharpen external focus on the marketplace with greater speed, productivity and effectiveness (Coca-Cola Journey, 2012 ).
Initial Public Offering
An initial public offering yesterday by Pepsi Bottling Group Inc. provided a stark contrast to the pyrotechnics of recent Internet offerings. In a spinoff from its parent company, PepsiCo Inc., Pepsi Bottling sold 100 million shares at $23 each, for a total of $2.3 billion, which will be used to pay off debt. The initial offering price was settled at the low end of the estimated range of $23 to $26, an indication that prepricing demand was less than the company had anticipated. The stock closed at $21.6875 on the New York Stock Exchange. Analysts were quick to distinguish Pepsi Bottling Group’s offering from the string of highly successful recent Internet deals, whose phenomenal openings have conditioned investors into expecting huge first-day gains (Pepsi Spinoff in Lackluster Stock Offering, 1999). Initial public offering involves the first or initial sale of the corporation’s common shares to the public in the hope of raising additional revenues for the corporation.
If you will apply in on the case of Coca Cola, the worldwide manufacturing and distribution of their carbonated drink products is the result of their IPO, which happened in 1919. A single share of Coca Cola is worth $40 dollars, yet the market value of their shares suddenly crashed to $19 per common share in 1920 (when they have undergone a secondary market offering). Despite of such crash in the market value of their common shares, Coca Cola managed to survive and extend operations to different regions around the world, particularly within the Asian and European regions. Different corporate entities later on affiliated with Coca Cola to further boost their revenue generation capabilities (Interesting Initial Public Offering of the Coca Cola Company and Its Worldwide Affiliate Units, 2010).